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How Age and Gender Impact Car Insurance Rates

When you auto insurance company calculates your car insurance premium, they take into account a variety of factors, each of which are given different weight. Some of these factors you have control over, such as your driving record and what type of car you own. Other factors, such as age and gender, you have no control over. So why do insurance companies consider these?

Gender

Women have paid lower car insurance rates than men for a long time. Statistically speaking, men are more likely to engage in risky behavior while on the road, and they die in accidents at a higher rate. Gender is an especially important factor to insurance companies when they're insuring young men.

Even though men pay more for insurance on average, there are many other factors at work when insurers calculate premiums. An adult man with a safe driving record will likely have a lower premium than a woman of the same age who has been at-fault for multiple accidents. In order to keep premiums affordable, men should focus on driving safely and explore other discounts.

Age

The way age affects your car insurance premium is pretty straightforward. Younger drivers don't possess the same experience and decision-making abilities as older drivers. They have an increased chance of being involved in an accident and filing a claim. In order to protect themselves, insurance companies need to charge teenage drivers more money.

As a person gains more experience, their insurance premium will decline. However, this decrease is partially dependent on whether or not a driver has maintained a safe driving record. A driver will start paying normal adult rates around the time they reach 25. After that, the way age factors into their insurance premiums will stay consistent until they reach old age.

Many insurance providers offer discounts to people once they reach the age of 50 or 55. When a driver has decades of experience behind them, they're able to make smart decision while on the road, and they're much less likely to be involved in fatal accidents. These discounts are often applied to a policy automatically.